12/31/2021
Today's main event is, of course, the FOMC and despite the thousands of words written by many eminent analysts, no one has any idea what the FED will say or do. Most commentators have an opinion on what they should do given the current inflation data but these are not normal times so we need to keep an open mind. My own view is the FED, along with most Central Banks, politicians, etc are pretty clueless at the moment so we may simply end up with some kind of fudge or mixed message. An approach that can be summed up as 'when in doubt, prevaricate'. Meantime, this morning's session was all about the British pound as the CPI came in way above expectation which helped to push gbp higher on the expectation of higher interest rates (this is the normal reaction) & we will know tomorrow whether the BOE takes this course of action. In gbp's move higher, gbp/cad was the strongest pair. However, gbp has not maintained its upward momentum and is currently moving lower, as we can see below. What's also interesting is the divergence in the gbp commodity pairs with gbp/aud moving lower, pretty much illustrating the somewhat muddled markets we have at the moment.
Understanding the central banks is something I cover in my Forex Program, details of which you can find here,
